Key Takeaways
What does BCMI at 0.5 mean for Bitcoin?
It shows that the market is cooling off mid-cycle, rather than collapsing, indicating a valuation equilibrium before the next expansion phase.
Are traders preparing for a recovery?
Yes. Retail added $435 million BTC, while whales sold 28,000 BTC, indicating confidence in recovery momentum near $111,000 resistance.
Bitcoin [BTC] has failed to close above the $111,000 threshold since October 15 as prices continued to fluctuate below that level.
Market data showed that a potential recovery was still in sight. However, the strong selling pressure from long-term bonds could hinder any recovery.
Bitcoin ready for a rally?
The Bitcoin Combined Market Index (BCMI) of CryptoQuant showed that although Bitcoin’s price weakened, its structural setup remained intact.
For the uninitiated, the BCMI aggregates market value with realized value (MVRV), net unrealized gain/loss (NUPL) and spent output profit ratio (SOPR) to capture valuation, profit-taking and sentiment.
At the time of writing, the BCMI value stood at 0.5, indicating that Bitcoin was in a neutral zone, also known as the mid-cycle equilibrium.
Source: CryptoQuant
Historically, a retest of this range (0.45-0.5) has preceded major expansions, with prices rising as on-chain conditions recovered.
That pattern suggests Bitcoin may be in a cool-down phase before momentum rebuilds, potentially paving the way for another boost toward the $111,000 level.
However, long-term investors seemed to resist this recovery trend.
Long-term holders continue to sell
Data from Glassnode confirmed that long-term holders have been steadily spreading BTC. Since October 15, when Bitcoin last closed above $111,000, this cohort’s total supply has fallen by approximately 28,000 BTC.
Source: Glassnode
Additionally, the data showed a notable spike in sales activity. Average daily sales by long-term holders increased from 12,500 BTC in July to 22,500 BTC per day in October.
This growing distribution trend, combined with weaker conviction among profit holders, increased pressure on short-term sentiment.
Data from CryptoQuant showed that unrealized losses totaled around $6.95 billion, indicating that several traders could still exit their positions before a stronger recovery takes place.
Still, retail accumulation is starting to offset some of that distribution.
Private investors provide a counterbalance
CoinGlass data showed Retailers have been net buyers since October 20, purchasing around $435 million worth of BTC within 48 hours – their largest inflow since October 10.
Source: CoinGlass
At the time of writing, this group acquired another $20 million worth of Bitcoin, underscoring their confidence in the asset.
Continued accumulation at this level could help counter bearish pressure from long-term holders and support Bitcoin’s momentum toward another rally.